Web Exclusive

Burning to Get Bigger

US Oil Refineries Are Expanding so They Can Process Petroleum from Canadian Tar Sands

By Michael Moreci

In the summer of 2007, the Indiana Department of Environmental Management granted British Petroleum’s refinery in the community of Whiting a permit that allowed dramatic increases in pollutants released into Lake Michigan. A few months later, another permit was granted, this time allowing BP a higher threshold in its air pollutant discharge. The applications for increased emissions from the refinery — a maze of pipes and smokestacks set among steel mills and chemical plants, all of which are perched along the lakeshore just minutes away from Chicago — are part of a larger $3.8 billion investment in the facility that will allow the plant to process the heavier crude coming from Canadian tar sands.

BP’s expansion of the refinery contradicts the company’s long-standing, self-imposed ban on the processing of crude oil from tar sands, and is a blemish on the company’s much-heralded green image. But the investment in the Whiting plant is only one piece of a larger puzzle. Across the US, other oil companies are also expanding their oil refineries to make way for a flood of crude oil coming from the tar sands boom. Environmental organizations have responded to the shift with protest and lawsuits.

Greenpeace has called the tar sands extraction in the Albertan wilderness “the biggest crime in environmental history.” Melanie Nakagawa, attorney for the National Resource Defense Council (NRDC), says that turning to tar sands is “scraping the bottom of the barrel to get our energy needs.” The process of extracting tar sands is razing large areas of the Canadian forest, contaminating its waters, and, because it is much more difficult to extract, worsening greenhouse gas emissions.

Despite the opposition, oil companies continue their push to expand tar sands refining capacity, seeing the Canadian heavy crude as an alternative to petroleum supplies from countries outside the continent that may not be as reliable US allies as the neighbor to the north. When the Whiting expansion is complete in 2011, BP hopes to refine 260,000 barrels of Canadian crude per day — triple its current capacity. That number, if BP estimates hold true, will remain consistent over the next 15 years. According to the Pembina Institute, a nonprofit environmental policy research group based in Canada, the process of refining heavier oil has the potential to release up to four times more greenhouse gases than refining more traditional crude. Some estimates project the Whiting refinery will see an annual increase of greenhouse gases that can soar as high as 5 tons — the equivalent of putting 400,000 new cars on the road. Nitrogen oxides would grow 11-fold, and various soot particles — some of which are the leading causes of heart failure and asthma — will increase annually by over 114 tons.

Ann Alexander, senior attorney at the NRDC, says that BP’s change in policy is one “based on addiction, not reality.”

“Tar sands crude oil is dirty from start to finish,” says Alexander, who is in the midst of litigation challenging the permits granted by the Indiana Department of Environmental Management (IDEM). “It’s bad enough that it’s fouling our natural resources here in the Midwest, but it’s completely destroying them up in Canada. There are good sources of energy we can turn to that don’t involve turning entire forests into a moonscape.”

One of the lawsuits Alexander is working on involves a citation that the EPA issued to BP in October 2008. Federal regulators say BP violated provisions of the Clean Air Act by making equipment modifications without prior permission. The NRDC charges that BP began its expansion in 2005 — before receiving what’s called a “major source permit,” as required by law. The NRDC has also filed a petition with the EPA objecting to the operating permit issued to BP.

BP did not respond to repeated phone calls and emails seeking comment for this story.

According to Rob Elstro, public information officer for IDEM, BP’s permit was reviewed thoroughly, and the project was deemed to be in compliance with all applicable regulations.

“For any proposed project that requires an environmental permit or permits, IDEM must, by law, issue a permit if the applicant demonstrates that the proposed project can be constructed and operated in compliance with applicable environmental regulations,” Elstro says.

IDEM and BP have met opposition from not only the NRDC, but also Chicago politicians and Whiting residents. The Calumet Project, a local community group, has hosted rallies, filed appeals against the permits, and disseminated information on the dangers of tar sands refining, calling it the “most destructive project on Earth.”

“We want people to understand the increase in pollution that refining tar sands will have on this area,” says Bessie Dent, a program coordinator with the Calumet Project who has worked diligently to educate Whiting citizens on the dangers of tar sands. One of the toughest challenges facing Dent’s campaign is that many Whiting citizens have been normalized to poor health — high cancer and asthma rates, mainly. “People think that they have to deal with it; that they just have to put up with it.”

If public cynicism wasn’t daunting enough, Dent and the Calumet Project also have to struggle with an apathetic — one could say antagonistic — Indiana legislature. Effective October 31, 2008, IDEM will no longer have an Office of Enforcement — which means that IDEM has few ways to punish any industry that causes environmental harm. But judging by Indiana’s second policy that really won’t matter much: effective the same day, Indiana has narrowed its definition of environmental harm, and will only investigate matters if damage can be proven. In Indiana, the onus to keep the environment safe is, essentially, on no one.

It’s been called Canada’s Highway to Hell, a two-line highway that runs straight from Edmonton into the Albertan wilderness. The tar sands region has quickly become Canada’s 21st century version of the California Gold Rush — and the race has just begun.

The region contains an estimated 175 billion barrels of recoverable oil and has been dubbed by some the “New Kuwait.” Currently, 16 percent of American oil imports come from Alberta. BP, Royal Dutch Shell, and Exxon have already committed $125 billion in the province, a figure that will likely grow over the next 20 years. Of the 1.25 million barrels extracted daily from the sands, 1 million of it comes directly to the US. By 2020, that number could be as high as 5 million, according to the NRDC.

One of the biggest hurdles in extracting crude from the area is access. Tar sands are too thick to be pumped from the ground the same way traditional oil is. Owing to this, it needs to be mined, and the deeper it is beneath the earth’s surface, the more difficult the extraction. In Alberta, nearly 80 percent of the oil lies so deep underground that it needs to be extracted either with steam injections or put through a “fireflood” process, which introduces compressed air to the bitumen and burns the oil for better flow. To extract a single barrel of bitumen from tar sands requires an energy input of 250 cubic feet of natural gas.

The first step involves razing the Canadian wilderness — carving away small plants, trees, and topsoil by the ton. Because five barrels of water are typically needed to produce a single barrel of crude, surrounding rivers are routed to the pits then eventually rerouted to man-made lakes of toxic waste. Tar sands extraction has put at risk over 13,000-square-miles of minable Albertan forest.

Once the forest and wildlife are out of the way and the pits have been dug, the process of extraction requires substantial manpower, heavy machinery (some of which can be up to three stories tall and weigh as much as a jetliner) and an incredible amount of energy. And that’s to produce only a single barrel of unrefined crude oil from two tons of tar sands.

Because of the machinery involved, tar sand extraction generates up to four times more carbon dioxide than conventional drilling. Over the next seven years, global warming pollutants released into the atmosphere from tar sands oil production is projected to quintuple to 126 megatons, up from 25 megatons in 2003, according to the Pembina Institute. What’s more, the tar sands industry consumes enough natural gas in a single day to heat approximately 4 million American homes, according to the NRDC.

Although Canada says it is committed to fulfilling its obligations under the Kyoto Protocol, the tar sands threaten to single-handedly wreck the country’s ability to comply with the treaty. The Alberta provincial government has openly stated that it won’t abide by the protocol — and since Canada doesn’t have a national Clean Air Act, the provinces have the right to set their own guidelines. The Pembina Institute found that only one of the 10 tar sand mining operations that they assessed had targets in place to reduce greenhouse gas emissions. And while the majority of these extraction sites have some kind of self-imposed environmental policies in place, only the Albian Sands Muskeg River Mine was being monitored by an independently accredited environmental management system.

So, like Indiana, Alberta is leaving environmental protection in the hands of the oil companies.

BP is by no means alone in its commitment to refining tar sands. Currently, there are 10 refineries in the midst of expansion in the US. And although the corporations that operate these refineries may boast of their commitment to green technologies and a more sustainable future — as BP frequently does — a reliance on tar sands crude negates all that, according to Alexander.

“A clean refinery is like clean coal — both are fictitious creations of industry public relations campaigns,” she says. “You can always make a new refinery cleaner than the old one. But looking at the big picture, that’s way too low a bar. There are many technologies out there with far lower emissions of greenhouse gases and other harmful pollutants than even the cleanest refinery.”

In 2008, Shell unveiled plans to make its refinery in Port Arthur, TX the largest in the US. The $7 billion expansion is the equivalent of opening a new refinery — something that hasn’t been done in the US in 30 years. In Richmond, CA, the city council has been sued by Earthjustice for approving Chevron’s refinery-expansion plans. Earthjustice contends that an environmental review concealed the exact increase in air pollution that would occur should the expansion take place; like Whiting, Richmond is also a low-income area, also overburdened with pollution-related health problems such as asthma and cancer.

For Earthjustice Attorney Janette Brimmer, this battle against the strings that get pulled to allow oil corporations to expand as they please — and increase their pollution levels as they see fit — is nothing new.

Brimmer first confronted the economic forces pushing tar sands expansion while working at the Minnesota Center. There, she was involved in a battle to ensure that state and federal pollutant requirements were being met as refineries planned for expansions and the construction of pipelines connecting directly to Alberta.

Oil corporations are attracted to the to tar sands, according to Brimmer, because they hope the heavy crude can help stave off the end of the oil age. Some estimates have Albertan tar sands carrying the world into the next century. The trick, of course, is fighting off environmental ruin for that long of a time.

In Brimmer’s experience, governments haven’t gone out of their way to help oil corporations, but they haven’t done much to stand up to them either.

“They’re passive,” Brimmer says. “They say ‘the economy needs cheap oil, and this will help us get it, and keep prices down.’ They allow themselves to be victims to the patting-on-the-hand-saying ‘we’re going to be okay,’ which ultimately builds the barrier for nonprofits and for citizens.”

While some government agencies have been guilty of bad action, others have been guilty of inaction, in taking the word of oil corporations and acting on fear: fear of the end of the oil era, of economic dislocations, of over-reliance on the Middle East.

Those fears are very real and need to be addressed. But inaction — continuing to rely on the filthiest petroleum on the planet — isn’t addressing the core issue of energy security. When the Alberta tars sands boom started, there was desperation simply to get oil by whatever means possible; the price per barrel was above $100 and climbing. There is also the contention that tar sands extraction is good for US national security, though Brimmer believes this to be the thinnest rationale used to defend tar sands.

One of Brimmer’s colleagues, University of Chicago economist John Durkin, calls that logic “ridiculous.” The reality is that oil will flow to whomever pays. If crude oil exports from the Middle East should falter, the world will turn to Canada. China, Russia, and India will all be pinning their hopes on Alberta.

The argument that tar sands will drastically bring down gas prices is also a false one. Brimmer experienced the dynamics of the market during her time working in Minnesota. There, people were convinced that drawing more oil to the state would lower the price per gallon. But since Minnesota already refines more oil than is consumed in the state, that didn’t happen.

“How can bringing more oil into the Midwest drag down gas prices?” Brimmer says. “It doesn’t work that way. It’s not how the market works.”

The future is unwritten. As US auto manufacturers collapse under the weight of their own oversized vehicles, they’ve been compelled to rethink their strategies. Part of that strategy has been to develop the next stage in automobiles — electric vehicles and plug-in hybrids. The tar sands, however, could set back that evolution by keeping oil relatively abundant and affordable. If enough refineries expand, if enough policymakers buy into the oil companies’ rhetoric of fear, then the course along this pipeline to nowhere will continue.

“Canadian crude is simply the absolute wrong direction,” Alexander says. “If you look at the new technology we have regarding much cleaner resources, we should decide what is best. That is not Canadian crude. It’s destructive on every level.”

While campaigning, President Obama made promises to break America’s addiction to dirty, dangerous fuel sources, such as tar sands. With so much attention — and money — being allocated to heal our fundamentally broken economy, such matters have been demoted in the priority hierarchy, especially since tar sands generates numerous jobs, both in Canada and the US. But unlike the economic fix, there’s no conceivable bailout for the environment. As many experts have warned, the window to reverse our ecological abuse is closing fast — and you can’t throw cash at environmental ruin. What’s needed is a strategy, a plan that actually plans for the future rather than responding only to the present.